ADVERTISEMENTS

A secretary and paralegal for lawyer John P. Karoly Jr. pleaded guilty Wednesday to failing to pay taxes on more than $70,000 of income, much of it from bonus checks.

Heather Kovacs, 41, pleaded guilty to two counts of knowingly and willfully filing false federal income tax returns. She faces up to six years in prison and a $500,000 fine.

Prosecutors said in court documents that Kovacs, who earned $89,000 annually at the Karoly firm, also received bonus checks for holidays and for work done on several high-profile cases.

She received a $30,000 bonus in November 2004 for her work on a case in which Karoly negotiated a nearly $8 million settlement from the city of Bethlehem for the family of John Hirko Jr., who was shot and killed by Bethlehem police during a raid in 1997.

Kovacs failed to report that bonus to the Internal Revenue Service, prosecutors said, and also failed to report $10,000 she received that year for a Christmas bonus.

In 2005, Kovacs failed to report additional bonus money and also failed to report more than $10,000 she received for cleaning the Karoly law offices, prosecutors said.

Kovacs was charged in March 2009 in the same indictment that charged Karoly with money laundering and wire fraud.

Investigators uncovered Kovacs' nonpayment of taxes while investigating Karoly for allegedly trying to defraud the estates of his brother Peter Karoly and sister-in-law Lauren Angstadt by submitting phony wills after the couple was killed in a plane crash in February 2007.

John Karoly pleaded guilty in July to the tax charges and was found guilty after a November bench trial of laundering $500,000 he originally gave to a local charity.

Karoly, who faces up to nine years in prison, is scheduled to be sentenced Feb. 18 in Philadelphia.

Source: The Morning Call

Bloggers, promote your law blog by nominating your blog for inclusion in USLaw.com's Law Blog Directory and RSS Reader. Benefits described.